Interest in overseas property remains high in the field of expat investments. Property websiteRightmove.co.ukreported more than 2.8 million searches for international homes in February for the second month in a row. And France overtook Spain at the end of 2011 as the most searched for location for British buyers looking to invest in a property overseas.

But while property investment is a popular way for expats to provide for their retirement, complications arise when the tax laws of their chosen country come into play.

France remains a popular expat destination, both for its proximity to the UK and its genteel way of life. House prices have held steady compared to Spain and the UK, and property finance has been available at 85 per cent loan-to-value.

Cost of living remains competitive as sterling hovers around €1.20/£1, almost at its highest level of the last three years. And while concerns remain about certain areas of the eurozone, France remains a stable option. Richard Way, editor at Overseas Guides Company, said: “In Europe, uncertainty over certain countries will continue to steer property buyers towards destinations they consider more economically stable and where any assets are safe – hence France being as popular as ever.”

But expats planning to bequeath or inherit property may find that this year’s election moves the goalposts.

Matthew Cameron, head of the French legal services team at solicitors Ashton KCJ, points out that French inheritance law is different to the UK and there are a number of potential complications that can arise. Unlike the UK, each person under French law has their own tax-free allowance, which differs depending on the relationship between them and the deceased.

“If a new French government comes into power we would anticipate a new budget would be pushed through and, by late summer, we could be talking about significant tax rate changes,” Mr Cameron said. “This could mean that inheritance tax allowances for children may be reduced considerably.”

Currently, French inheritance tax varies from zero per cent to 60 per cent. An inheritance tax-free allowance between parents and children of about €160,000 (around £134,000) is available to any child of the deceased. If their parents had a €200,000 house in France, only about a fifth would be taxable.

“It’s reckoned that the inheritance tax free allowance is likely to be cut by two-thirds,” said Mr Cameron. “That means there will be much higher tax for children to pay, and one or two thousand euros could become €20,000 – a substantial difference.” Preferential allowances for a child who is left a property by a parent could also change.

France already imposes an annual levy of 0.25 per cent on prestige property valued at more than €1.3 million and 0.5 per cent over €3 million, for both residents and non-residents.

French inheritance tax depends on the residence status of the deceased and, to a lesser extent, the beneficiary. But it is far from a straightforward calculation.

“The distinction is usually clear, but not always,” said Mr Cameron. “The French and English regimes agree that a person’s house will pass in accordance with the laws of the country in which it is situated, while everything else, such as bank accounts, chattels and so on, will pass under the rules of where he or she was permanently resident at the time of death.”

As with all investment matters, it is well worth getting independent advice on your personal circumstances. Certain measures can be taken to simplify inheritance matters – Mr Cameron suggests that parents give the property to their children as a gift, for example.

“Some options for structuring the estate are also not possible when it has already been bought, so timely advice is essential,” he said.